Tainted Pills: Another Scheme In Marks' Quest For Cash?

June 22, 1986|By Bob Levenson and Lauren Ritchie of The Sentinel Staff

Who is Eddie Marks?

The FBI charges that he is a clever con man who put rat poison in capsules and engineered a bizarre scheme to cash in on the crash of a pharmaceutical stock.

His friends say he is the friendly coach of a Little League baseball team who loves kids and needs companionship.

Others know him as a sometime con man, sometime salesman who took pride in getting car buyers to pay top prices while convincing them they got a great deal.

Born in the Boston suburb of Framingham, educated in Catholic schools and a former enlistee of the Navy, Marks, 24, once aspired to be a policeman. Now he has a long criminal history of creative but generally unsuccessful fraud schemes.

Police in the Boston area talk about the time ''Fast Eddie'' financed a new car in his roommate's name but was tripped up when the dealer phoned to say the car was ready and the roommate answered.

They talk about his quirky banking methods, the money he kept squirreled away in a hallway ceiling three floors below his apartment.

Marks is awaiting trial in the Seminole County Jail, the first person ever charged in connection with the capsule-tampering scares that have plagued the nation since 1982 when seven residents in the Chicago area died from cyanide in Tylenol capsules.

''I would very much like to make a statement and set the record straight, but my lawyers have advised me not to say anything,'' Marks said in a telephone call from the jail.

He said he feared news stories would be one-sided and that anything he said about his background or personality could hurt his defense. Marks said when a verdict in the case is rendered, ''I will be happy to let it all be said.''

He was indicted Thursday on 12 counts of tampering with a consumer product, 10 counts of wire fraud and 5 counts of communicating false information to law enforcement agencies. Marks faces up to 153 years in jail and a $495,000 fine if convicted.

He was arrested May 30 at Los Angeles International Airport, where he was traveling under a fake identity. The arrest came two months after federal agents found traces of rat poison in Contac, Teldrin and Dietac capsules removed from store shelves in Orlando and Houston.

FBI agents believe Marks called news organizations and police around the country and warned them of the contamination. They have accused him of creating a national stir to make a six-figure profit in a plan that depended on a sudden drastic drop in the price of SmithKline Beckman Co. stock, maker of the medicines.

Instead, the stock went up. Marks lost $2,500.

So far the FBI is basing its case against Marks on three key pieces of evidence: his fingerprint on one poisoned capsule, tapes of the caller identified as Marks by former co-workers, and records that show Marks bought the potentially profitable options on SmithKline stock the day the calls started.

A PLAN DOOMED TO FAIL

Marks talked about the case in an emotional telephone conversation from the jail to Ken Carpenter, a California friend, the day after he was arrested.

Carpenter, who was introduced to Marks when they sold cars together, said Marks told him FBI agents and news media ''all got the wrong idea about me.'' ''He was really surprised by all the reporters,'' Carpenter said. ''He said, 'They all think I tried to kill people.' He said it was really important in his mind to let me know he wasn't trying to hurt or kill anybody. He said all he was trying to do was something on the stock market.''

Rick Ackerman, a stock trader in San Francisco who was one of the first to tip the FBI to the unusual options trading, said the plan worked like this:

Marks spent $2,500 to buy 360 ''put'' options on SmithKline stock. The options gave Marks the right to buy 36,000 shares of the company's stock at the prevailing price and sell it before the exchange closed March 21 at the fixed price of $80 a share.

When Marks bought the options on March 18 and 19, the stock was selling at $86.50 and $88 a share.

For each dollar the stock dropped below $80 a share, the holder of put options would have made $36,000. If the stock were to drop to $75, for example, Marks could have exercised his option and made a $180,000 profit.

The holder would lose his investment if the stock failed to fall. The stock closed at $88.35 a share on March 21.

Marks' purchase of the put options was unusual because pharmaceutical stocks were strong and on the rise, drug company analysts said at the time.